Usaasa faces criticism over set-top box tender

Johannesburg - The state-owned agency tasked with supplying connectivity to all parts of South Africa is facing criticism from the Democratic Alliance (DA) about a set-top box tender.

Set-top boxes (STBs) help analogue television sets receive digital signals. The International Telecommunications Union (ITU) has set a deadline of June 2015 for countries across the globe to migrate to digital broadcast - a process that has benefits such as opening up more TV channels and freeing up spectrum for faster mobile broadband services such as 4G.

South Africa's government then plans to subsidise set-top boxes for those who can’t afford them. The R4.3bn tender is planned to supply and deliver five million government-subsidised STBs.

And the Universal Services and Access Agency of South Africa (Usaasa) was tasked with gazetting the tender deadline for set-top box makers on November 21 2014. Bidders had until January 6 2015 to submit their proposals.

But Usaasa's set-top tender process has kicked off after South Africa’s digital migration process has been held back by controversy and delays.

Local broadcasters are divided on government’s insistence on having set-top box controls which, for example, will render televisions equipped with digital signal capabilities as unnecessary.

Also, government has also failed to meet its own digital migration deadlines while other African nations such as Kenya have already started the process. And President Jacob Zuma’s decision to have separate communications and posts and telecommunications ministries has further resulted in a reported ‘turf war’ over which department is responsible for digital migration.

“The Democratic Alliance (DA) is concerned that in a rushed attempt to partially meet the digital migration deadline of 17 June 2015 by delivering some STBs this year, proper processes and evaluation may be circumvented and sidelined, rendering the tender process unlawful,” said the DA in a statement on Monday.

In its statement, the DA went on to list reasons for its concerns, which include issues such as the fact that “the broadcast digital migration policy has not yet been approved by cabinet” and the “the low-key manner in which the tender process was conducted, which sidelined many companies that would have submitted bids, (and) casts doubt over whether the process will be fairly adjudicated”.

Other issues that the DA has raised include that Direct-to-Home (DTH) standards have not been approved yet, that bidders were briefed on supply of set-top boxes even before "fundamental aspects of their functioning had been decided and finalised", and that financing for the subsidised STBs has not been secured.

“At a presentation to the parliamentary Portfolio Committee on Telecommunications and Postal Services last September, Usaasa stated that of the R4 333 734 961,08 required, only R2.39bn had been approved by National Treasury for payment through the Universal Service Access Fund (USAF),” said the DA.

The DA also noted that Usaasa CEO Zami Nkosi told the Portfolio Committee in September 2014 that he “hoped that levies would be raised from all active licensed Electronic Communication Network Service (ECNS) providers”.

The DA said this means that telecom networks such as Vodacom, MTN, Cell C, Telkom and Neotel would have to pay up to R2bn to cover the shortfall as these are the only ECNS providers who pay into the USAF.

Usaasa responds

Usaasa said in a statement that on September 19 2014, it presented its “state of readiness” on the implementation of the broadcasting digital migration project before the parliamentary portfolio committee on telecommunications and postal services.

Usaasa added that it informed committee members that it “resolved to source the services of a consulting company to evaluate the tender so to avoid unfounded innuendos as demonstrated by the DA's allegations”.

“The agency further informed the committee that in the interest of time it thought it was prudent to initiate the tender process calling for quotation for both encryption and non-encryption set-top-boxes system,” said Usaasa.

“Usaasa was mindful of the fact that a policy decision had not been concluded, but was concerned about its ability to meet the deadline of 17 June 2015 as set by the International Telecommunications Union.

“In consultation with the Executive Authority, Usaasa issued an invitation to tender that sought quotations for both control and non-control set top boxes. This was done to ensure that by the time a policy directive is finalised by cabinet, time consuming administrative processes would also been concluded,” the agency added.

Usaasa, in its statement, went on to add that it gazetted the bid on November 21 2014 and that the bid was then further advertised in The Sunday Times on November 30 2014. The tender was also available on the Usaasa website, according to the agency. The closing date for the bids was subsequently extended to January 6.

“This unfortunate statement (from the DA) did not come as a surprise as we are aware that there are prophets of doom - within and outside government - that are hell bent at disrupting the government service delivery program. These people are so desperate to the extent of manufacturing baseless allegations,” said Usaasa.

Usaasa further said that it “holds no brief from any set-top-box manufacture” and that it “is transparent”.